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Technology Stocks : CMGI What is the latest news on this stock? -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (9868)	6/11/1999 2:55:00 PM
From: Millionairess	Read Replies (2) \| Respond to of 19700

1:10 PM - CNBC's take on CMGi leaving the r2: CNBC-POWER LUNCH CNBC'S SHARON EPPERSON ON CHANGES IN THE RUSSELL 2000 JUNE 11, 1999 SUMMARY: Epperson says the small cap index is replacing some of its Internet stocks with industrial and food stocks. She says some of the fast growing issues on the small cap index must be replaced with smaller issues Bill: The Russell 2000 is being revamped tonight. The small-cap index is replacing some of its sexier Internet stocks with less glamorous issues, like industrial and food stocks. The reason for the changes is that many of the stocks listed on the benchmark index are getting so big they have to be replaced with smaller companies. What does this mean to investors? Sharon Epperson is here now to bring us the story. In my own solid gold moment, I get to talk about the Russell reshuffle. Bill: Yes, we can. Sharon: Why should you care about this Russell reshuffle? Well, first of all, we're talking about the most widely used benchmark for small-cap stocks. If you have small cap funds, you'll probably watching to see how you manager performed against the Russell 2000. But what makes this year's realignment even more significant than in the past is we're really talking about taking out some of the hottest Internet stocks around. Internet stars like e-Trade group, CMGI and Lycos are expected to be replaced by some value oriented cyclical stocks and food companies. While Internet stocks make up about 7.7% of the Russell 2000 now, after tonight that weighting will drop to about 1.5%. About 26 Internet issues will leave the index. Some smaller Internet stocks will replace them. But there's no guarantee they'll perform nearly as well. Still, experts tell me this reshuffling is good news. We'll definitely have a better gauge because we'll have an index that's once again more diversified, where the returns of the index will reflect a broad cross-section of stocks as opposed to just a limited number of internet stocks that have gone up, you know, three, four, five times in price over a period of a year. Morningstar analyst Jeff McConnell says the Russell 2000 used to be an easy index for small-cap fund managers to beat. But this year, with the phenomenal performance of Internet stocks, it's much harder to be competitive. The Russell is up about 6% so far this year, while the average small cap fund is up only half that much, about 3.1%. That says it's down, but any way - that's down today. Down today, but overall year to date. Small cap fund managers should be able to rest easier now that the benchmark will more closely reflect their holdings. Unfortunately I'm told some fund managers have complained that these hot internet stocks are leaving the index, just when they're becoming more attract I've since their market caps dropped as the performance slipped over the last few week. Now, investors should be prepared for some extra volatility in internet stocks and other small caps over the next few weeks and while some index funds may try to trade early or wait until July to rebalance their portfolio, Goldman Sachs analyst Marie Sue says most funds will rebalance their portfolios during the last week of June. So there will be some fancy foot work here. Bill: The index funds, thanks, Sharon Epperson, see you later.